Insight Series - Israel-Hamas Conflict (#5)

Insight Series - Israel-Hamas Conflict (#5)

December 2023

Proximities, to better inform its clients and the international community, will be producing a weekly intelligence briefing on the key updates & analysis related to the ongoing Israel-Hamas conflict and how we see it developing. This briefing will be current as of 1400hrs (GMT+1) on the date of publication (8 December 2023). If you require any supplementary information or wish to speak to our analyst team about any recent developments, please email info@proximities.com.

Executive Summary

  • Following the breakdown of Israel and Hamas’ week-long truce period, Israel Defence Forces (IDF) have resumed their ground assault operations in the Gaza Strip. However, the IDF has expanded the scope of its operation to include southern Gaza during the ongoing incursion. Israel’s ground assault into Gaza has remained focused on targeting areas in the Strip that are perceived to be housing Hamas militants, such as refugee camps, religious buildings, critical infrastructure such as hospitals or schools, and the terrorist group’s vast tunnel network.
  • The expansion of the IDF’s ground assault has incurred additional international commendation from both hostile states and its allies, including the US. Indeed, Washington has issued its strongest statement against Tel Aviv’s actions in the Strip to date and levied visa restrictions on Israeli settlers targeting Palestinians in the occupied West Bank. Despite the allies’ growing tensions, Tel Aviv’s inability to achieve its strategic goals within Gaza will heighten the risk that the conflict will persist for the foreseeable future. Furthermore, Israel’s strategic position within Washington’s Middle East security plan and continued US domestic and political support significantly lower the likelihood of the US rescinding its support of Tel Aviv wholesale over conflict.
  • Meanwhile, the spillover effect of the Israel-Hamas conflict in the wider Middle East and North Africa Region returned during this monitoring period. Most notably, the Yemen-based Houthi militant group ramped up its rocket attacks, now also targeting commercial ships in the Red Sea. These attacks – plus the seizure of the Galaxy Leader vessel several weeks ago – underscore the heightened risk posed to firms operating in the region by the Hamas conflict, especially those perceived to be linked to the Israeli state or organisations. Similarly, other Iran-linked threat actors – both physical and cyber – launched a series of attacks against Israeli military forces and businesses. Further such attacks – both kinetic and cyber - are highly likely to occur in the coming days, with these threat actors using the attacks as tit-for-tat responses to IDF activity in Gaza they perceive as inflammatory.
  • Lastly, international pressure for Tel Aviv to end its current operations in Gaza has persisted during this monitoring period, with protests by social activist groups remaining the primary concern. While most rallies have remained peaceful, pro-Palestinian supporters in Melbourne Australia caused family members of Israelis killed or abducted by Hamas to flee a hotel they were staying at due to their demonstrations. Meanwhile, protests directly targeting defence firms perceived to be supplying arms to Israel were also protested by anti-arms groups in the UK during this monitoring period. Further unrest is highly likely to emerge in response to the IDF’s growing ground assault on Gaza. While these protests will likely largely be peaceful, there is a latent risk of incidents like Melbourne occurring again. Moreover, clashes between law enforcement and protesters will remain a prominent potential risk, with such incidents exposing the protested organisations to unwanted reputational exposure as a result.

What are the Key Trends?

Figure 1: IDF advanced positions across both northern and southern Gaza as of 1 December 2023

Key Military and Security Trends:

  • Israeli Defence Forces’ (IDF) “OperationSwords of Iron” (OSI) resumed on 1 December after several rounds of hostages were released and additional talks with Hamas to extend a week-long peace truce collapsed. While Tel Aviv’s pre-truce operations were focused predominately on targeting alleged Hamas-linked infrastructure in Northern Gaza, its post-truce assaults have widened to include southern part of the Gaza Strip as well. While fighting continues to flood further south towards the Egyptian border, IDF operations appear to be concentrated on cutting off the main north-south route in Gaza and launching strikes on Southern Gaza’s main city, Khan Younis. The current large-scale operations are likely to continue until at least the end of 2023 and into early 2024.
  • In response to growing international pressure to ensure that this round of operations results in fewer civilian casualties, Tel Aviv has begun regularly publishing online maps which highlight“safe areas” in the Strip where civilians can avoid potential strikes. Despite these publications, on-the-ground reporting from international media outlets and local citizens claim that “nowhere is safe” and those areas being used as shelter -e.g. town hall buildings, hospitals, schools, etc. – are continuing to be bombed in areas where the IDF are allegedly telling people to go. Such reports – if confirmed – are indicative of the IDF’s ongoing tactic of targeting Gazan critical infrastructure due to previous intelligence that Hamas militants were using such buildings to hide from IDF raids. For example, the IDF began operations against a hospital funded by the Indonesian government in northern Gaza on 19 November, killing 12 Palestinians in the complex in artillery. Further strikes targeting buildings believed to be housing Hamasmilitants - including refugee camps, religious buildings, and critical infrastructure such as hospitals or schools – are highly likely to continue across Plaza in the coming days, especially as additional alleged Hamas enclaves are discovered. With such strikes likely to occur in both areas demarked by TelAviv as (non-) safe, there is a heightened risk they will exacerbate the risk of domestic unrest amongst pro-Palestinian groups in both the Middle East and the West (see key social trends for further analysis).
  • In concert, the IDF has remained focused on eliminating Hamas’ vast tunnel network that lies beneath the Gaza Strip (see Proximities’ Israel-Hamas Conflict Brief #1). International media outlets citing US officials claimed that the IDF is considering flooding the Gazan terrorist organisation’s vast tunnel network with seawater to drive its members out of hiding. Further details of this operation remain scant at present, including whether the IDF would consider utilising this option before all hostages are released. However, this operation could face several logistical issues. Most notably, many of the estimated 500 km of tunnels underneath Gaza are not all connected and would require multiple attempts from the IDF to fully submerge the tunnel network. Moreover, such an operation would likely require the IDF to lay pipes or transport water from the Mediterranean Sea to the tunnel entrances and protect the pipes along the entirety of their route from kinetic sabotage attacks. Despite these reports, there is currently a low likelihood of such an operation being undertaken considering Hamas is still in possession of Israeli hostages, which Hamas has claimed are being hidden in “safe places and tunnels”.
  • The risk of the Israel-Hamas conflict spilling over into the wider Middle East and Northern Africa region re-emerged following the collapse of the IDF and Hamas’ truce. Most notably, the Yemen-located and Iranian-back Houthi rebel group launched several attacks against three commercial vessels in the Southern Red Sea over the previous weekend (2-3 December). Houthi chief negotiator and spokesperson Mohammed Abdul-Salam claimed that they attacked two Israeli ships – the Unity Explorer and Number 9– after they “rejected warnings [from the group]”. Despite the US NavyDestroyer – the Carney – responding to the two ships’ distress calls and shooting down three drones, a briefing by Israeli and US forces following the incident claimed that “one ship was significantly damaged […] and apparently is in danger of sinking”. This incident represents the most severe direct risk posed to non-government-linked businesses since the rebel group seized an Israeli-linked cargo ship – the Galaxy Leader - in the Red Sea in late November. Additional Houthi-linked attacks and seizures are highly likely to occur in the coming days, especially following Mohammed Abdul-Salam’s claim that “all ships belonging to the Israeli enemy or that deal with it will become legitimate targets”. Maritime and shipping firms that can redirect their business activities around the Red Sea are advised to do so to minimise their exposure to this threat.
  • Meanwhile, other pro-Palestinian and Iran-linked proxy attacks against Israel restarted during this monitoring period as well. More specifically, multiple consecutive days of cross-border strikes between the IDF and Lebanon-located Hezbollah militants started on 3 December. Prior to Israel and Hamas’ week-long truce, the IDF and Hezbollah launched near-daily tit-for-tat rocket attacks against strategic positions in Lebanon and Israel, respectively. This resumption of daily rocket attacks constitutes the worst fighting between Israel and Hezbollah since 2006, with Hezbollah attacks reaching deeper into Israeli territory than ever before. With Tel Aviv’s assault operations across Gaza likely to persist in the coming days, there is a high likelihood that Israel-Hezbollah tit-for-tat border attacks will remain in lockstep with the Gaza conflict’s kinetic activity.
  • The threat posed to commercial operations by these attacks is expected to be limited given that they are likely to remain targeted against Israeli military operations or critical infrastructure operators – such as telecommunications or energy firms - supporting their activities. However, there is a latent risk of firms operating along the Israel-Lebanon border region and/or dependent on Israeli critical infrastructure in this region experiencing business continuity threats, e.g.power disruptions or limited communication network availability.

Figure 2: The last tracked location of the Galaxy Leader and Houthi rocket attacks near the Bab-al-Mandeb Passage

Key Cyber Trends:

  • While cyber has had a limited impact on the conflict since its start in early October, this week has seen a notable uptick in cyber incidents. Most notably, cyber security firms Intezer and Check Point discovered that an AdvancedPersistent Threat (APT) group allegedly linked to Hamas is targeting Israeli critical infrastructure organisations with malware attacks. This malware –known as SysJoker – acts as a backdoor that hackers can use to access their targets’ systems. Further details about this campaign – including its aim –remain scant at present. However, given the industries targeted – education, IT infrastructure, and energy – there is a moderate likelihood that these SysJoker attacks are stepping stones to launch more disruptive/destructive attacks, such as ransomware. These disruptive/destructive attacks would likely be aimed at both expressing the group’s political grievances with Tel Aviv’s actions in Gaza and limiting the logistical capabilities of the critical infrastructure organisations perceived to be supporting the IDF. As such, there is a heightened risk of further Hamas-linked cyberattacks in the coming weeks, especially with IDF operations across Gaza unlikely to desist. Critical infrastructure operators – e.g. energy, telecommunications, or IT – supporting the IDF or Israeli government will be the most at risk for this malicious activity.
  • Meanwhile, the Iran-linked hacktivist group Malek Team claimed via the messaging platform that it leaked over 500GB of data from the Ziv Medical Center in Safed, Israel. The Israeli National Cyber Directorate claimed that the incident had been contained and caused limited disruptions to the centre. The Malek focus on leaking data and not more disruptive activity indicates that this group’s cyber capabilities are likely rudimentary and pose a limited threat to organisations beyond the reputational damage associated with data breaches. Nevertheless, this incident underscores Iran-linked proxy groups’ continued targeting of Israeli critical infrastructure via traditional military or cyber means in retaliation for the IDF’s actions in Gaza. Further Iran-linked cyberattacks against Israel’s critical infrastructure sectors – e.g. energy or - are highly likely to emerge in the coming weeks in support of the Palestinian people. While the threat posed by Malek Team appears to be limited, other more sophisticated Iranian threat actors – such as APT Group CharmingKitten – could join the fray and launch more disruptive/destructive attacks –such as ransomware or wipers – and cause significant business continuity concerns and financial damage as a result.

Key Mis-Disinformation Trends:      

  • No notable mis-disinformation trends were recorded during this monitoring period.

Key Social Trends:

  • Medium and large-scale protests of the IDF’s ground operations in Gaza have continued across the globe during this monitoring period. For example, thousands have gathered across Australia over the last week to call for the end of the conflict in Gaza. However, some 20 pro-Palestinian protesters also stormed a hotel where the family of Israelis killed or abducted by Hamas were located. The protesters reportedly forced the family members to flee under police escort to a nearby police station. Australian Prime Minister Anthony Albanese has condemned the demonstrators' actions.
  • Similar protest actions targeted against businesses perceived to be supporting the IDF have also resurged in Western countries during this monitoring period. For example, two separate anti-arms and pro-Palestinian rallies took place in front of a factory owned by defence firms BAE (British Aerospace) Systems and an L3 Harris in Glasgow Scotland and Brighton UK, respectively. Neither protest caused any damage. Further protest movements are highly likely to emerge in the coming weeks, especially with Tel Aviv’s operations across Gaza set to continue in the coming days. These rallies are expected to continue to be planned in and around major cities, public transport infrastructure, and political buildings, which heighten the risk of businesses operating in those areas experiencing short-term business disruptions. However, more targeted demonstrations against firms perceived to be supporting the Israeli military – such as defence firms – are at a heightened risk of increasing as well. This activity is expected to remain peaceful. However, there is a latent risk of clashes emerging between police forces and protesters, which could pose a notable reputational concern for the associated firms.  

Key Political Trends:

  • International condemnation of the IDF’s ground assault into Gaza has returned following the resumption of the conflict between Israel and Hamas. Most notably, Israel’s important ally – the US – has increased its rhetoric against Tel Aviv. USVice President Kamala Harris stated on 2 December that “too many innocent Palestinians have been killed”, constituting the US’ sharpest comments against its allied state since the start of the conflict. Similar comments were also made by US Secretary of State Antony Blinken on 30 November when the “massive loss of civilian life and displacement of the scale that we saw in northern Gaza [must] not be repeated in the South”.
  • While Washington’s condemnation has not been translated into any actions with long-term implications for Israel, US President Washington has imposed visa restrictions on Israeli settlers “undermining peace, security, or stability” in the occupied West Bank. Settler attacks in the occupied West Bank have increased significantly because of the Hamas conflict, with at least nine West Bank Palestinians killed since 7 October or 3x as many as in all of 2022. With attacks in Gaza and the West Bank highly likely to persist in the coming weeks, there is a heightened risk of the US levying additional regulatory actions against Israeli citizens. However, the risk of sanctions being levied is still currently assessed to be low, with Washington’s support of Tel Aviv expected to persist given the strategic role it plays in Washington’s Middle East security plan vis-à-vis containing Iran and its proxy groups and continued US domestic and political support.



The growing uncertainty looming over the conflicts exacerbates the threat landscape faced by organisations operating both in Israel and the surrounding region. Therefore, Proximities has constructed a series of scenarios (organised in decreasing likelihood) based on not only the ongoing developments but also the Israel-Palestine conflict’s historical context to indicate how the conflict could develop. Given the development during this monitoring period, the conflict has continued to sit firmly within Proximities’ scenario 3: a war of attrition (see below for further analysis).

Scenario 3: War of attrition

The war of attrition scenario entails that the current situation between the IDF and Hamas fighters continues indefinitely. While the two sides have historically already been engaged in a long-term conflict, this scenario would take a form like the Russia-Ukraine conflict in that both sides would engage in more regular operations aimed at targeting infrastructure, weapon caches, personnel critical to the opposition and civilian urban targets, such as public gatherings or critical infrastructure entities. Despite this, these operations would unlikely be able to deliver a critical strike that would end the conflict quick manner. This scenario would likely evolve if Israel partially succumbed to pressure from its allies – particularly the US – to not further escalate the conflict and implement its Operation Swords of Iron to the fullest.

This scenario would likely have one of the higher humanitarian impacts due to the significant imbalance between Hamas and the IDF’s military capabilities. More specifically, Palestine – in the Gaza and West Bank - has already experienced a significantly higher number of civilian casualties compared to Israel, a trend that is likely to intensify further in a long-term conflict.

On top of these social concerns, a prolonged conflict would also likely have significant economic impacts on both Israel and Palestine. Palestine’s economic outlook was already dire before the conflict broke out, with the World Health Organization (WHO) calling it a “humanitarian catastrophe”. In contrast, Israel was ranked as the fourth best-performing economy amongst the Organization for Economic Cooperation and Development in 2022 by the Economist. However, recent policy blunders by Israeli Prime Minister Benjamin Netanyahu – particularly his judicial overhaul – have seen FDI in the country drop by 60% and caused notable swings in the Israeli stock market.

However, Tel Aviv’s more aggressive approach towards this conflict iteration with Hamas has economic observers concerned about long-term impacts on Israel’s economy. Most notably, many of the reservists who have been called into service for this conflict are technology entrepreneurs, teachers, lawyers, or other sectors that make up an important part of Israel’s entrepreneurial economic activity. As such, rating agencies such as Moody’s or Fitch have downgraded aspects of Israel’s economic rating – such as debt –after warning that the heightened geopolitical tensions surrounding the conflict decrease investors’ confidence due to the risk of “a diversion of resources in the economy” emerging.  

Nevertheless, Israel is highly likely to receive some type of financial aid from allies such as the US, with US President Joe Biden already expected to ask Congress for 14 million USD to provide Tel Aviv with security and military aid. While such financial support would likely mitigate the risk of any short-term economic instability, the prolonged nature of the conflict could heighten the risk of Tel Aviv introducing policies such as reducing interest rates to support its wartime economy but subsequently reducing the value of the shekel and hindering Israel’s long-term economic growth. As such, any prolonged IDF mobilisation will likely be weighed against its economic impact, with any significant hindering of Israel’s already slowed economy likely to heighten the likelihood of Tel Aviv calling for a reduction of troops or an extended ceasefire similar to 2014, which would trigger the start of our scenario 1.

Scenario 1:  Return to Status Quo

The most sought-after scenario from humanitarian organisations, intergovernmental organisations, and Israel’s Western allies regarding this conflict is either a ceasefire and/or the situation de-escalates enough to where tensions between Gaza and the Israeli forces return to the“status quo”. This return could be triggered by events such as a UN peacekeeping mission or the economic burden of a prolonged conflict forces Tel Aviv to end its military operations (see scenario 3). A return to the status quo would refer to the retreat of the additional Israeli forces, the cessation of all bombing and military operations into the Gaza Strip, and the return of all critical infrastructure operations – such as energy, water, or gas – to Gaza by the Israeli government. However, there will still be a significant amount of investment and construction required to return the Strip to what it was pre-conflict. This will likely - alongside historical factors – maintain tensions between Palestinians and the Israeli government for the coming months and heighten the risk of sporadic protests by Palestinian citizens in Gaza and the West Bank. Such activity could be met with a strict Israeli or Palestinian security response, and businesses and their personnel are advised to avoid areas of typical interest for protesters, such as outside political capitals or highways, to minimise their exposure to these threats.  

Despite the great appeal of this scenario to not only Israel’s allies but also the international community, several mitigation factors ensure this is a lower likelihood scenario. Most prominently, the communication lines between Hamas and the Israeli government are limited to non-existent and neither side has shown an inclination to open such lines. This lack of communication highlights the two sides’ all-time-low relations and Israel’s focus on eliminating Hamas as a threat and unwillingness to keep an option of diplomatic de-escalation readily available. Moreover, regional states with clout in the region have had limited success convincing either side to come to the negotiation table like the Egyptian government did during the 2014 Gaza War. While nation-states such as Egypt have had some success during hostage negotiations, other nation-states such as the US have largely toed the line of publicly supporting Israel and its actions whilst also calling for“diplomatic efforts” to improve the situation.  

Scenario 2: Partial land acquisition & proxy war

In this scenario, Israeli ministerial officials follow through with their promise and annex a large swath of the Gaza Strip as compensation for the Hamas attack. Such aggressive activity could trigger the Iranian government and its proxy groups – such as Hezbollah – to follow through with their promises of launching “pre-emptive” strikes against Israel if they engage in a ground offensive against Palestine and prompt a proxy conflict between these actors. Such a conflict would present a significant risk to not just the Palestinian territories but also Israel as well, particularly from these actors’ rocket strikes.

While Israel’s airspace is protected by its so-called“Iron Dome” air defence system, the dome is not 100% effective. Indeed, Rafael– the state-owned Israeli defence firm that developed the system – claims that the technology has a 90% success rate at intercepting enemy rockets. However, The University of Singapore’s Middle East Institute stated this claim is “very contentious” because it is based on “estimates and data” provided by the Israeli government itself. Indeed, data gathered during the early stages of the 2023 Israel-Hamas conflict found that the between 2,200 – 3,000 rockets fired by Hamas towards Israel since 7 October have been successful in overwhelming the Iron Dome.

But Hezbollah has much more sophisticated weapons systems and the financial support of the Iranian government and has hundreds of thousands of rockets at their disposal, with it probable that such an amount can surpass the Israeli rocket defence system. However, Hezbollah is highly unlikely to launch its entire rocket stockpile at Israel at once and instead sporadically launch a series of rockets towards Israel against strategic targets, such as military installations or weapons caches. Nevertheless, there remains a heightened risk that civilian targets could be selected as well, with critical infrastructure entities, such as those in energy, telecoms, or defence, constituting high-value targets for such activity. Entities and organisations based in an unpopulated area of Israel will be particularly vulnerable in this scenario as the Iron Dome is programmed to destroy rockets which are considered threats to civilian urban areas.

However, this threat will likely be notably mitigated by the presence of US military personnel in the region. For example, the USS Carney, a destroyer, located in the northern Red Sea shot down multiple rockets and several drones that reportedly were launched by Houthi Forces in Yemen and headed towards Israel. Pentagon press secretary Brigadier General Pat Ryder stated that the missile interception was “a demonstration of the integrated air and missile defence architecture that we have built in the Middle East […] we are prepared to utilise, whenever necessary to protect our partners and our interests in this important region”. Nevertheless, there will remain a latent risk of Iranian proxy or pro-Palestinian militia groups’ missile attacks penetrating the Israel-US defence system and striking strategic targets such as critical infrastructure entities, government buildings, or military infrastructure.

Scenario 4: Full annexation of Gaza

While this can be seen as the worst-case and lowest-likelihood scenario, it would also likely have the greatest impact on business operations and regional stability in the region. Most notably, the full annexation of the Gaza Strip by Israel would bring about strong condemnation from the international community, particularly the Arabic-speaking community. Such a scenario would also likely see at the minimum the partial retraction of Washington’s support for Tel Aviv’s actions in Palestine, especially as calls from the international community increase for action to be taken by the UN Security Council and other intergovernmental organisations against Israel. While it is probable that this scrutiny will not be as severe as against the Russian government in response to the Ukraine conflict, there is a high likelihood that sanctions and other regulatory actions will be levied against Israel in response to the full annexation of the Gaza Strip.

In addition, more intense protests will likely be launched across the world in response to this action, which would be comparable if not of greater scale than those seen during the start of this current Israel-Hamas conflict. While these demonstrations are unlikely to be initially targeted against businesses, entities that show public support for Israel and/or are seen to be undermining the Palestinian cause will likely become targets of pro-Palestinian activist rallies. Indeed, these rallies are likely to be centred in areas of political importance, such as government buildings, embassies, or capital centres. However, protests in Palestine and Israel are likely to be met with significant resistance from Israeli security forces which could lead to clashes and violence. Demonstrations in other major cities – such as Washington D.C. or Amsterdam - are likely to remain peaceful and show solidarity with the plight of the Palestinian people, however, such activity could turn more violent if met with counter-protesters or with significant police resistance.

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